The Seven Principles of WOM and Buzz Marketing Panos Mourdoukoutas L George J

The Seven Principles of WOM and Buzz Marketing Panos Mourdoukoutas l George J. Siomkos The Seven Principles of WOM and Buzz Marketing Crossing the Tipping Point Prof. Panos Mourdoukoutas Prof. George J. Siomkos Long Island University Athens University of Economics & Business Dept. Economics Patission 76 C.W. Post Campus 103 34 Athens 720 Northern Blvd. Greece Brookville NY 11548 [email protected] USA [email protected] ISBN 978-3-642-02108-4 e-ISBN 978-3-642-02109-1 DOI: 10.1007/978-3-642-02109-1 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2009928097 # Springer-Verlag Berlin Heidelberg 2009 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg, Germany Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com) To Georgios and Dimitris Preface In his best-selling book, The Tipping Point, Malcolm Gladwell has popularized the concept of social epidemics, the social changes brought about by sudden changes in human behavior caused by products or ideas that disseminate and spread like infectious diseases and shape history. ‘‘If we understand the way in which social epidemics, such as crime waves and fashion fads, reach critical mass – what epidemiologists call the tipping point – we can shape history...’’ . i The term ‘‘tipping point’’ refers to the moment of critical mass, the threshold, the boiling point. The right word, at the right time, in the right ‘‘socially promiscuous’’ ear can change the world, says Gladwell. ‘‘Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push – in just the right place – it can be tipped.’’ii This push, Gladwell argues, often comes from a few people that can spread sticky messages to others. In 1984, for instance, the push to reduce New York City crime came from one man, Bernard Goetz, when he shot at the teenagers who harassed him in the subway. From that time on, would-be criminals had to think twice before they harass citizens. As a result, crime declined significantly. Gladwell touches upon a special case of social epidemics, consumer epidemics, i.e., the rush of consumers to buy certain products and services, like sneakers, Hush Puppies, and fiction books, emphasizing the importance of Word-of-Mouth (WOM) campaigns launched by a few ‘‘special gifted’’ people, market mavens, connectors, and salespeople who create a consumer buzz and hype. Sometimes, consumer epidemics spread in spite rather than because of their creators’ intentions. The extraordinary growth in sales of Hush Puppies in 1995 and 1996 came despite – rather than because of – the efforts of the manufacturer. The preppy brushed suede shoes became a fashion item when style gurus, such as Isaac Mirashi, wore them in Manhattan bars and clubs, with WOM spreading their fame across the US and beyond. Divine Secrets of the Ya-Ya Sisterhood, a modestly reviewed novel, iMalcolm Gladwell (2002), The Tipping Point, p.12. iiMalcolm Gladwell (2002), The Tipping Point, p.12. vii viii Preface became a bestseller as book-reading groups recommended it to each other on the grapevine. WOM also helped catapult the Harry Potter books, the film The Blair Witch Project, Pokemon and Charles Frazier’s Cold Mountain to success. Gladwell’s work on consumer epidemics has drawn the attention of professional marketers looking for low-budget-high-buzz WOM campaigns, as an alternative to traditional high-budget mass-media commercials. A number of books, including Mark Hughes’ Buzzmarketing and Emanuel Rosen’s The Anatomy of Buzz, discuss how companies can create buzz and hype for their products by outsmarting rather than outspending the competition. In What Sticks, Rex Briggs and Greg Stuart discuss the failures of conventional high budget mass media advertising and the successes of modern low-budget buzz advertising campaigns. In Grapevine, Dave Balter and John Butman discuss the ‘‘Art of Word-of-Mouth Marketing,’’ the connection between the ‘‘marketing dog’’ with its ‘‘tail,’’ WOM: the ‘‘what,’’ ‘‘why,’’ and ‘‘how-to’’ of WOM campaigns. In Anatomy of Buzz, Emanuel Rosen describes how companies can launch and manage buzz for their products by taking a close look at the person-to-person communication process. In The Change Function, Pip Coburn discusses how the product user’s ‘‘pain’’ affects the chances of a product to take off or, instead, to crush and burn. According to George Silverman, WOM is 3–10 times more effective sales promotion vehicle than traditional marketing for both nig and small start-up brands.iii WOM is of particular importance in service industries, such as banking, insurance, and among complex technology products, such as cellular phones, where people rely on the experience of others to gain tacit information about the product or the service. Still, a number of questions remain unanswered. Why WOM campaigns are effective for some products, helping them cross the tipping point while fail for others? Why, for instance, LCDs took off and DATs did not? Why Nitendo’s Wii Radiating Fun game console eclipsed Sony’s PlayStation 3 in the 2006 Christmas season? Why Iridium and Goldstar, the first global cellular phones, flipped, while Blackberry took off? Why Apple Computer’s personal computer Lisa and personal organizer Newton failed, while McIntosh and i-Phone succeeded? Why the VHS videocassette player succeeded, while the BetaMax failed? Why are people eager to try hair restoration products like Rogaine, but slow to adopt laser surgery for correcting myopia? Which group of consumers should be the target of a WOM campaign, the innovators or the early adopters? How WOM turns into buzz? Addressing these questions, this book is a theoretical and a practical guide to launching an effective WOM and buzz campaign that helps products cross the tipping point, reaching the mass market, in the form of seven simple principles: (1) Begin with the consumer; (2) Be innovative; (3) Target the right group; (4) Create the right message; (5) Find the right environment; (6) Launch a WOM campaign; and (7) Turn WOM into Buzz. iiiSilverman, George (2001). The Secrets of Word of Mouth Marketing: How to Trigger Exponential Sales Through Word of Mouth, AMACOM. Acknowledgments The authors are indebted to Mr. Antonis Kelesis, General Manager of Mantis S.A. for his comments and insights about Red Bull, Georgios Mourdoukoutas and Dimitris Siomkos for their constructive comments on teenage hype about cool gadgets, and Emmanouela Manganari for helping the preparation of some of the tables and charts of the manuscript. ix Contents 1 Introduction: How to Cross the Tipping Point ............................ 1 2 Principle 1: Begin with the Consumer ..................................... 9 2.1 A Case in Focus: Beginning with the Consumer the Under Armour Athletic Apparel Way ......................................... 16 3 Principle 2: Be Innovative .................................................. 19 3.1 A Case-in-Focus: Mastering Innovation the Apple Way .............. 26 4 Principle 3: Target the Right Group ...................................... 27 4.1 Case-in-Focus: Why TiVo has yet to Reach the Tipping Point ... .... 39 5 Principle 4: Create the Right Message .................................... 41 5.1 A Case-in-Focus: Making Flying as Affordable as a Pair of Jeans – £29 One Way: Conveying the Message as Easy Jet Does .... 49 6 Principle 5: Find the Right Context ....................................... 51 6.1 Case-in-Focus: McDonald’s and Starbucks Capitalize on Emerging Social Trends ................................................ 58 7 Principle 6: Launch a WOM Campaign .................................. 61 7.1 Case-in-Focus: The Simpsons Family is Getting Big through a WOM Campaign ..................................................... 74 8 Principle 7: Turn WOM into Buzz ........................................ 77 8.1 Carefully Select the Target(s) .......................................... 83 8.2 Stir up Interest in the Product .......................................... 84 8.3 Transform Product Interest into Desire and Passion .................. 87 8.4 Hire Mass Seducers to Infiltrate the Ranks of Consumers ............ 88 8.5 Keep the Hype Alive ................................................... 90 xi xii Contents 8.6 A Case-in-Focus: Using Buzz and WOM to Build Craft-Beer Brands ...................................................... 92 8.6.1 The Craft-Beer Market ......................................... 92 8.6.2 The Consumers ................................................. 93 8.6.3 Craft-Beer Brands . ............................................. 93 8.7 The Case of Rolling Rock: Buzz Through Viral Marketing .........

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